Professional Documents
Culture Documents
Unit 1
Unit 1
I
high cost of production and constant headaches for the management personnel. Therefore,
for the success of an enterprise, human resource planning is a very important function,
which can be neglected only at its own peril. It is as necessary as planning for production,
marketing, or capital investment.
i
For an individual, it is important because it helps him to improve his skills and utilize his
capabilities and potential to the utmost. For an organisation, it is important because it
improves its efficiency and productivity. It is only through initial human manpower planning
that capable hands are available for promotion in the future.
In simple words, Human Resource Plani~ingis undcrstdod as the process of forecasting an
organisation's future demand for, and supply of the right type of people in the right numbers.
It is only after this that the HRM department can initiate a recruitment and selection
process. HRP is a sub-system in the total organisational planning. Organisational planning
includes managerial activities that set the conlpany's objectives for the future and determine
the appropriate means for achieving those objectives. HRP facilitates the realisation of the
company's objectives by providing the right type and the right number of personnel. HRF',
then, is like materials planning that estimates the type and quality of the materials and
supplies needed to facilitate the manufacturing activities of the organisation. HRP is also
called manpower planning. personnel planning or employment planning.
A few definitions of HRP are worth quoting here:
1) HRF' "includes the estimation of how many qualified people are necessary to carry
out the assigned activities, how many people will be available, and what, if
anything, must be done to ensure that personnel supply equals personnel demand at
the appropriate point in the future."
2) "Specifically, human resource planning is the process by which an organisation
ensures that it has the right number and kinds of people, at the right place, at the
right time, capable of effectively and efficiently completing those tasks that will
help the organisation achieve its overall objectives. Human resource planning, then,
translates the organisation's objectives and plans into the number of workers
needed to meet those objectives. Without a clear-cut planning, estimation of an .
organisation's human resource need is reduced to mere guesswork."
The manpower plan is a part of the corporate plan. Without a corporate plan, there can
be no manpower plan. If there are several imponderables and unpredictables in the
corporate plan, there will be difficulties in manpower planning. Whether or not the
manpower plan meets the requirements and is in tune with reality depends on clarity in
goals and validity of the stated assumptions. The other important point is the time
frame in defining the 'future'. In manpower planning, the future can be classified into
three periods: (a) the short-range or immediate future; (b) the mid-range; and (c) the
long-range future.
None of these three can be spelt out in terms of set number of days, months or years.
The "immediate future" may refer to the current situation and experiences and even
concern issues such as overtime and replacements. If there has been previous planning
for manpower, the plans may serve as a guide in the immediate future. If not, a
beginning should be made at orrce.
The mid-range future has a different time span in various companies. It can be as short
as a few months or as long as several years. Perhaps, most would agree that 2-3 years
period as a mid-range.
The loug-range could be 5 years, while 10 to 15 years span could be used for a
perspective plan. Long range plans must be made on the basis of various trends in the
economy and in the labour market, and on long-term trends of production in the
company. Long-range plans are general rather than specific, flexible rather than rigid.
Nevertheless, a plan can be extremely useful in identifying factors and trends that need Human Resource Planning
to be reckoned with for early warning of possible problems. The long lead time
provides the opportunity and resilience to meet exigencies and make necessary
adjustments. More complete plans can be had as time slowly brings the long-range into
short-range.
Activity 1
As part of this activity you are required to identify and tabulate the number of
personnel ;it various levels and departments in your organisation. Compare your
tabulation with the levels of personnel mentioned in the manpower plan of your
organisation. Are there any major differences? Please find the reasons.
Forecasting Techniques
We shall now attempt to look at the aspect of.forecasting future requirements. This can
be done through various techniques.
The process of estimating manpower demand consists of four steps:
an approach
a basic factor
a method
a technique
Human R g o u m Planning
Company Objectives and Smegic Plms
Production Capital/
Forecasts Objectives/Processes Finance Plans
4
1 Manpower
AniiJySlS Manpower Forecasts
(Current (Future Situation)
Situation)
Inventory Overall Unit Budget Management
Eqloyment Manpower Manpower Agreement Manpower
Prdductivity Forecast Forecast Estimates
Organisation
u-
Manpower Objectives
and Policies
Phase In
Approach
There are eight possible approaches:
1) Subjective 2) Objective
3) Global 4) Component
5) Techno-economic 6) Non-economic
7) Deterministic 8) Probabilistic
The order in which they are mentioned suggests the formation of four groups, each of
which comprises two mutually exclusive approaches e.g. (i) Subective or Objective,
(ii) Global or Component etc.
The groups, between themselves, are not quite mutually exclusive.
A subjective approach to manpower demand estimation uses intuition, impression or
judgement. Opposed to this, the objective approach tries to justify the estimate of
demand on the basis of certain factors or logical explanations.
A global approach would try to estimate manpower demand as an overall figure,
directly for the entire problem under consideration, whereas a cwponent approach
would first estimate the demand for segments of the problem and then aggregate it.
Human Resource Planning The techno-economic approach ccmbines the technological, economic and organisational
considerations mentioned earlief, whereas the non-economic approach utilises only
socio-political and other considerations.
Basic Factor
A basic factor means a variable to which manpower demand can be related. The choice
depends upon the number of considerations which together constitute the multi-
dimensional framework of the particular problem facing us.
Methods
According to Gareth Steiner, statements about the future can be made in two senses:
What will occur?
What should occur? C+
According to Steiner, what is more significant than the time element is the way in
which the change in one phenomenon i.e. manpower, is associated with change in
another (basic factor, which was mentioned earlier).
The rate at which the change takes place exerts an influence on the frequency of
measurement and forecasting required and affects the need for different kinds of
feedback. Ln practice, what managers see as desirable will be influenced by past
experiences. All these assessments involve making assumptions about managerial
capacity, manpower utilisation or the rate of change in manpower.
According to Steiner, the major advantages of manpower forecating are:
a) It corresponds to the way managers commonly think and talk about manpower.
b) It encourages the recognition that, even where output is not readily measurable, we
can still make good forecasts of manpower, provided we can quantify work done in
some way.
c) It highlights the way in which we have to control the effect by other inputs such as
capital on manpower requirements.
Techniques
In this context therefore, one can outline a few specific techniques of manpower
demand forecasting.
Subjective
The forecast here is made on the basis of estimates by experienced people whose
experience has taught them what types of changes are important and the rates of change
involved. Implicitly however, subjective techniques involve subjective estimation of
workload and manpower utilisation and their rate of change.
The advantage lies in that the data collection is required and intangible factors like
social opinion, fashion, etc. can be built in. However, the disadvantage lies in the errors
of the human mind which can be perpetuated while carrying out the exercise of demand
of estimation for manpower. Forecasts based entirely on subjective assessment are
unlikely to give very good results. However, supplementing objective techniques with
subjective estiamtes can be useful e.g. through using subjective probabilities.
Accuracy of Techniques
No method of forecasting can be entirely without error. Some changes are unique (such
as new legislation or a decision to close down an establishment) and hence are more or
less unpredictable as to timing. Such errors as are due to these unique changes are
unavoidable. There are also errors that are partly avoidable since they stem from
inaccurate information or inappropriate techniques. Even where errors are theoretically
avoidable, it unrealistic to expect more than a proportion of error to be actually
avoidable.
However, a forecast, or any resulting objective, must be modified as soon as it seems
that it no longer represents the most likely occurrence. Unfortunately, the poeple
become emotionally attached to forecasts. We must remember, however, that errors have
a cumulative effect over time.
Taking the above factors into consideration, a corporate approach to manpower planning
is to be developed. In doing so certain key considerations such as the following
emerge:
a) What positions and individuals are to be included in the planning effort? A simple
rule of thumb is to include all positions which are critical to corporate performance
and profits and/or pose recruitment poroblerns.
b) What is the appropriate manpower planning horizon? Experience shows that it can
extend up to 4 to 5 years. Beyond 5 years, technical manpower forecasts have
doubtful value due to pervasive imponderables and unpredictables in the
environment. Within the planning period, there should be a formal method of
review and assessment at least once every year.
c) With what business factors will manpower needs be related? For a company
producing fertiliser, it could be tons of fertiliser, for an automobile unit, it could be
the number of cars and trucks. For a retailer, it could be the rupee value fo sales.
To be useful, the predictor should meet at least two requirements: (a) it should be/
directly related to the essential nature of the business; and (b) changes in the
selected factor be proportional to changes in the manpower required.
Accuracy of Projections
The accuracy of the projections is based on the following factors:
a) The predictability of the industry, i.e., whether the business conditions are generally
stable or not.
b) The degree of integration on manpower planning with other company planning
efforts, and the amount of experience that the company has with all types of
planning. If a company plans very far into the future, it may be sacrificing
accuracy and flexibility.
c) Historical data about manpower levels and about the selected business factors with
which manpower projections are related. Even the experience of operating
managers is not useful in making projects and estimates in the absence of good
manpower records. The projections, at best, can be as good as the data base.
d) The knowledge, experience and outlook of the operating managers. When
manpower projections are made as part of the total planning process, even when
the forecasts are not accurate, they atleast succeed in providing warning of possible
problems.
e) The framework for manpower utilisation for the forecast period.
Activity 2
Visit a hospital, you have known or access to and do the following:
a) Assess and identify the objectives of manpower planning in the hospital.
b) Identify the critical areas and the extent of manpower shortages and the reasons
for such shortages.
c) Identify manpower surpluses and reasons thereof.
d) Identify and fix forward targets for manpower development.
e) Identify the major manpower problems and their causes and interrelationship.
Human Resource Planning
1.6 DEVELOPINGMANPOWER STRATEGY: KEY
CONCERNS
In this section certain key concerns in developing manpower strategies are briefly
considered.
Approach
While assessing future requirements, the estimates depend mostly upon the nature of
manpower assumptions in the organisation. Corporate strategy can influence manpower
strategy and vice-versa. Here we may consider three approaches: the zero budgeting
approach, the ideal, and the realistic.
Zero budgeting, as the name implies, is an approach in which one forces unitldivision
managers to justify their total operation iiom zero. The objective is to encourage
managers to seriously think about their current activities. Given the restrictions posed
by law and unions, the practicability of this approach for ongoing organisations in
manpower planning is doubtful.
It is only new units that can start thinking about manpower planning in terms of what
might constitute an 'ideal' approach. Arry decisions on sub-contracting, off-loading
some functions like maintenance produc:tion-tr:chnology, etc., may depend on the
perceived notions of what constitutes arb ideal for the organisation.
Organisations can proceed on a realistic approach using existing information. A
company which operates on a three-year planining cycle may record manpower levels
in subunits or division in such a way that it i s easy to monitor and hold managers
responsible (see Fig. 1.2). Organisations whic h choose to supplement manpower plans
with different business parameters and manpc Iwer ratios. (e.g. gross value added per
employee, capital employed per employee) hi nve to be varied about the fact that the
future may not follow the past and ajustment s may have to be made for variations.
1
-
Year 1 - Year 2 ,
Manpower increases
Business Activity
Capital Expenditure
Takeoverlmerger
Manpower decreases
Business activity
Capital expenditure
Disinvestment
Productivity improvement
Activity 3
Managing a largelmedium size hospital with special setting of the environ'mental
factors of developing countries and the great demands placed on the hospitals by the
public, make it essential for the hospitals to take whatever measures possible to see
that its effectiveness is demonstrated to the greatest possible extent. This involves
careful planning of various activities of the hospital.
Based on the contents discussed in this unit do the survey of hospital to understand
manpower planning and prepare brief, notes broadly on the lines given below:
1) Hospital manpower situation report on existing manpower and services.
2) Manpower requirements, availability and distribution a t various levels.
3)' Future supply of manpower from training schools and institutions
4) Mismatches between supply and requirement
5) Solving mismatches
6) Organisational and managerial problems
7) Manpower strategy and outline plan
8) Detailed plan
9) Implementation of the plan.
10) Monitoring
1.7 LET US SUM UP
Manpower planning affects organisation strategies and vice-versa. We have reviewed the
concept of manpower planning and studied the objectives and reasons for current
interest in the subject. There are three stages in manpower planning process. We
examined the techniques and special problems of manpower supply and demand at
organisational level. Finally, we have considered certain key concerns in developing
manpower strategies.